1031 exchange Depreciation Carryover
I am working on a 1031 Exchange, one rental property with many improvements relinquished, exchanged for another rental property. I have figured out Form 8824, as well as the Remaining carryover Basis of the Old Property and the excess basis of the new property.
I am having problems entering the remaining carryover Basis (Building cost and a list of improvement) to arrive at the correct current year depreciation and future depreciations. If I enter the remaining basis of the building and the list of improvements on the asset entry form and fill in all of the relevant info on the section MACRS Property involved in a like-kind exchange on the same asset entry form, then enter in the original start date of depreciation 10/1/2009, Proseries Basic calculates the partial year depreciation for the current year correctly (10/1/2025 is the new asset replacement date). However, looking at the asset Life History data, Proseries treats the remaining basis as if it started depreciating in 2009 (the old property start date) with prior years accumulated depreciation already taken, which affects all future full year depreciation because Proseries thinks the remaining carryover basis started depreciating in 2009, when in fact, the remaining carryover basis should start to depreciate on 10/1/2025 until the end of the 27.5 year period, which is around 2037 (because we need to continuing with the original old property start date of 10/1/2009). I just need the carryover basis to start depreciating on 10/1/2025 and end on 5/31/2037. This depreciation life history showing me all future annual depreciation amounts are incorrect.
What I am doing wrong with the asset entry form?
Thank you!
SW
